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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-11-08 Daily Xml
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RAILWAYS (OPERATIONS AND ACCESS) (ACCESS REGIME REVIEW) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 27 September 2011.)

The Hon. D.G.E. HOOD (16:49): This is, in many ways, a fairly simple bill and, for that reason, my contribution will be fairly brief. I think it is fair to say—and it is probably true of all members in this chamber—that we are always supportive of measures that seek to improve access to railway systems in South Australia. It is a means of transport that I think enjoys multipartisan support, if I can put it that way.

By way of background, South Australia set about reforming our railway access regimes to comply with the principles set out by the Competition and Infrastructure Reform Agreement agreed by COAG in 2006. The agreement was aimed at providing a national system of economic regulation for significant infrastructure, such as ports, railways and other export-related infrastructure. Expected by-products of these changes were reduced regulatory uncertainty and compliance costs borne by users of the infrastructure and of course, in this case, more prolific access to railways for all users.

To ensure compliance with the Competition and Infrastructure Reform Agreement principles, South Australia was required to submit an application to the National Competition Council (NCC) for certification of the regime. The NCC approved and accredited our access regime for 10 years and recommended the codification of a review regime at five-yearly intervals. This bill codifies the NCC's recommendation, which requires the Essential Services Commission of South Australia (ESCOSA) to conduct a review of the operators and railway services to ensure that the access regimes that we have implemented are appropriate in light of market practices.

Family First believes that reviews are not only appropriate but necessary, especially in light of the varying size of operators who wish to access our rail system. Without comprehensive and consistent reviews of our access regime, monopolies, sweetheart deals or other restrictive and anticompetitive trade activities between operators and businesses may go undetected, which would clearly be contrary to the purpose for which the access regime laws were implemented. There must be accountability within the industry to ensure that third-party operators, whether large or small, have just and equitable access to our railways.

South Australian industry relies on the railway systems and it is the lifeblood of our state, in many ways. As has been mentioned on occasions in this council, and in the other place, access to certain railway systems has been limited and it has been alleged that a sweetheart deal was made between the rail company Genesee & Wyoming and the Canadian-owned grain handling company Viterra which hindered third-party operators in last year's harvest.

With our grain industry grossing nearly $3 billion for the state each year, any preclusion or denial of access to storage, transit or any infrastructure that assists in the sale of grain, must be addressed as a matter of urgency by the government and, indeed, this chamber. There is currently a select committee investigating these claims and certain issues that arose after last year's grain harvest. I do not wish to further comment on the issues that are under investigation except to say that Family First is very keen to play a role in that investigation and will continue to apply pressure and ask the difficult questions so that we can achieve a suitable outcome for all those involved.

The issue with the company does, however, highlight exactly how important it is that we have an effective review system so that the users of the railways, regardless of who they are, can access the infrastructure that our legislation has provided for without exclusion or the requirement to pay any prohibitive costs. It is a requirement of this bill that the finding of the review conducted by the regulator be forwarded to the minister and laid before both houses of parliament (something we wholeheartedly support). This ensures that a candid review of the recommendations will occur and hopefully appropriate changes will be made when, and if, they are necessary. I commend the government for the inclusion of this provision in the bill.

Railways have a long history in this state. Family First is supportive of any system which allows access and transparent regulatory measures to allow all users of the railway system the access they want at a reasonable cost. Access reviews must be conducted to ensure that our legislated regimes are appropriate and that operators fully comply with the requirements that this parliament has placed upon them. Family First believes that the review proposed by this bill is one significant step in the right direction to allowing equitable access of the rail system to all who make use of it and it is for that reason that we support the bill.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (16:54): I rise on behalf of the opposition to speak to the Railways (Operations and Access) (Access Regime Review) Amendment Bill 2011. As members would be aware, this bill originated in the House of Assembly and the shadow minister for transport, Mr Steven Griffiths, member for Goyder, has, by and large, put our position and posed a number of questions in the debate in the House of Assembly.

It is not my intention to speak for any great length of time, but members would be aware that last year the Railways (Operations and Access) (Miscellaneous) Amendment Bill 2010 was supported through this parliament. As such, legislation intended to provide a consistent national system of economic regulation for nationally significant infrastructure, including railways, has been enacted.

The 2010 bill also implemented efficiencies into the act (such efficiencies were based on recommendations following an inquiry conducted by the Essential Services Commission in 2009). These reforms aim to reduce regulatory uncertainty and compliance costs for owners, users and investors.

I am not sure whether this is going through, and the minister may not have the answer here today; maybe she might like to provide it in a written form later. It may be in the Roxby Downs debate in the next sitting week, but I will put the question now. In the discussions relating to BHP's railway line, the former treasurer and former minister for the expansion, the Hon. Kevin Foley, made some reference to that particular railway line—even though it will be owned by BHP—coming under some national regulatory scheme in the future. I thought that was a little strange because it certainly is owned by BHP and is not open to any third-party access. However, I just wonder whether those privately owned railway lines are captured with this particular legislation.

The intention of the 2011 amendment bill is to include the requirement for the Essential Services Commission of South Australia to conduct five-yearly reviews into the South Australian rail access regime. This amendment is the result of an application for the certification of the South Australian rail access regime as an effective regime for a period of 10 years, which was submitted to the National Competition Council on 29 December 2010.

The National Competition Council recommended that the regime be certified for a period of five years; however, it advised that certification for a period of 10 years would be considered if the act was amended to formalise the requirement for ESCOSA to review the railway services covered by the regime on a regular basis, i.e., every five years. Therefore, this bill is a sensible move. The opposition is happy to support it.

As I indicated before, my colleague Steven Griffiths posed a number of questions in the House of Assembly, but my understanding is that the issues relating to the questions he posed have now been resolved, and we are happy to support the passage of this bill.

The Hon. M. PARNELL (16:57): This is a relatively simple bill which requires the Essential Services Commission of South Australia to conduct five-yearly reviews of the South Australian rail access regime. This requirement is being inserted into the act to satisfy the requirements of the Competition and Infrastructure Reform Agreement, which was signed by the Council of Australian Governments in 2006.

The Greens will be supporting this legislation, but I do want to put a couple of questions on the record. Whilst I do not intend to delay the passage of this bill, I would ask that, if the minister is not able to answer these questions now, she could perhaps write to me after the bill has gone through so that I can get back to constituents.

When this bill first reached the Notice Paper, I contacted a number of constituents, including the South Australian Farmers Federation. The Farmers Federation raised two issues which I think are relevant to this legislation. The first issue relates to how well competition policy is working in the rail freight sector in South Australia. The second issue relates to farmers who are required to cross railway lines to access their properties—private level crossings, if you like.

In relation to the first issue, the Farmers Federation says that it is not convinced that there is easy access for other rail companies to be able to access lines owned and operated by other companies. In fact, back in July 2010, the Farmers Federation wrote to the Australian Competition and Consumer Commission setting out its concerns. I will put some of that submission on the record. I understand that the figures that I will quote have been used in a number of public submissions and they are by no means confidential.

The Farmers Federation says that it is concerned about the acquisition of the company Freightlink by Genesee & Wyoming Australia Pty Ltd. Its submission says:

Genesee & Wyoming Australia own or operate rail tracks in South Australia. Through this, there is the possibility to effectively stop any other rail companies from using their lines by charging exorbitant rates and requiring other restrictive practices.

Earlier this year SAFF Grains were given details of how Genesee & Wyoming Australia have put unreasonable controls on their rail lines in South Australia and are charging exorbitant fees. For example, on the line from Pinnaroo to Tailem Bend, a distance of 145 km, it has been calculated that for one train carrying 2,200 tonnes that Genesee & Wyoming Australia would charge $59,400 compared with VLine $6,224, Australia Rail Track Corporation $2,482 and NSW Rail $2,317. This pricing structure virtually precludes any other company from using rail in South Australia easily and cost effectively. There is also an additional rail weighing fee of $2.75 a tonne (2 to 5 cents would be reasonable).

The South Australian Farmers Federation Grains Industry Committee has urged the Australian Competition and Consumer Commission to urgently investigate this lack of competition.

My question of the minister at this stage is: what is the South Australian government doing to ensure that monopoly behaviour is not putting our farmers at a disadvantage? In relation to this bill in particular, what role will the Essential Services Commission play? Will the Essential Services Commission be able to insist on fair prices being charged for access to rail infrastructure as part of their five-yearly review?

The second issue raised by the Farmers Federation is in relation to farmers who need to cross railway lines in order to access their properties. It would be no surprise to anyone here that the owners of the railway lines have drafted standard form contracts that provide a high level of protection for them, and a fairly onerous set of obligations on the farmers, including requiring farmers to accept liability for a range of risks, many of which are uninsurable.

My question of the minister is: what role can or will ESCOSA play in supervising these access contracts; or, rather, is it a matter for the yet-to-be-established small business commissioner to resolve disputes between the rail companies and farmers? So, with those brief questions and remarks, the Greens will be supporting this bill.

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (17:03): By way of concluding remarks in relation to this bill, I wish to thank honourable members for their second reading contributions. This bill is quite a straightforward bill; it is a very small bill. It introduces a requirement for ESCOSA to review the operations and railway services subject to the access regime in the Railways (Operations and Access) Act 1997 every five years to determine whether the access regime should continue to apply.

It is quite straightforward in relation to matters that the Hon. David Ridgway raised in relation to private operators being captured. I believe these matters will be dealt with in the indenture bill so there will be lots of opportunity to delve into them. In relation to the questions that the Hon. Mark Parnell has raised in response to SAFF's concerns, I will have to take those on notice and I am happy to provide a written response to you in the future. With those remarks, I thank members for their support and look forward to dealing with the committee stage expeditiously.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (17:06): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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